Question

Question 1 View Policies Current Attempt in Progress The internal control procedures in Dayton Company result in the following provision Identify the principles of internal control that are being followed in each case. (a) Employees who have physical custody of assets do not have access to the accounting records (b Each month the assets on hand are compared to the accounting records by an internal auditor d! Aprenumbered shipping document is prepared for each shipment of goods to customers

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Answer 1

1.

		Internal Control Principles
a.	Employees who have physical custody of assets do not have access to the accounting records	Segregation of Duties
b.	Each month, the assets on hand are compared to the accounting records by an internal auditor	Independent Internal Verification
c.	A prenumbered shipping document is prepared for each shipment of goods to customers	Documentation Procedures

2.  

		Internal Control Principles
a.	All over the counter receipts are entered in cash registers	Physical Controls
b.	All cashiers are bonded	Human Resource Controls
c.	Daily cash counts are made by cashier department supervisors	Independent Internal Verification
d.	The duties of receiving cash, recording cash and having custody of cash are assigned to different individuals	Segregation of Duties
e.	Only cashiers may operate cash registers	Establishment of Responsibility

3.

		Internal Control Principle
a.	Company checks are prenumbered	Documentation Procedures
b.	The bank statement is reconciled monthly by an internal auditor	Independent Internal Verification
c.	Blank checks are stored in a safe in the treasurer's office	Physical Controls
d.	Only the treasurer or the assistant treasurer may sign checks	Establishment of Responsibility
e.	Check-signers are not allowed to record cash disbursement transactions	Segregation of Duties